DOJ, CFTC argue Kalshi’s sports and event contracts are financial swaps as Arizona enforcement escalates
The Block
The DOJ and CFTC are intervening in Arizona to argue that Kalshi’s prediction contracts fall under federal jurisdiction as financial swaps, not gambling.Summary
The U.S. Department of Justice and the Commodity Futures Trading Commission (CFTC) have petitioned a federal court to block Arizona’s criminal prosecution of the prediction market operator Kalshi. Federal authorities assert that Kalshi’s event-based contracts are "swaps" under the Commodity Exchange Act, granting the CFTC exclusive regulatory jurisdiction and preempting state gaming laws. This legal action highlights a growing conflict between federal oversight and a patchwork of state-level enforcement efforts attempting to classify prediction markets as illegal sports betting.
(Source：The Block)